This bill creates a federal tax credit for individuals who donate money to nonprofit organizations that provide private school scholarships to elementary and secondary students. Donors could claim a credit worth up to the greater of 10 percent of their adjusted gross income or $5,000 per year, with unused credits carried forward for up to five years, though the total amount of credits available nationwide is capped at $5 billion annually from 2025 through 2028 and allocated on a first-come, first-served basis. Scholarships could be used for a wide range of expenses including private school tuition, tutoring, textbooks, standardized test fees, dual enrollment costs, and therapies for students with disabilities, and would be available to families earning up to 300 percent of the area median income. The scholarship money students receive would not count as taxable income for their families. The bill also includes provisions barring government entities from controlling or interfering with participating scholarship organizations or discriminating against religious schools, and it would apply to tax years ending after December 31, 2024, effectively taking effect in 2025.
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